There certainly appears to be no shortage of money interested in investing in the burgeoning direct homebuyer segment.
Opendoor has been raising money hand over fist at a valuation of more than $1 billion, a newcomer named Perch launched last week with $30 million in funding, plus publicly traded real estate giants Zillow and Redfin both recently expanded into direct buying.
The other growing player is OfferPad, which announced this week that it recently secured $150 million in new funding to continue growing its direct buyer business.
OfferPad is headquartered in Gilbert, Arizona, and currently buys homes directly from sellers in Atlanta, Charlotte, Las Vegas, Los Angeles, Orlando, Phoenix, Salt Lake City, and Tampa, then makes the necessary upgrades or improvements and sells the home.
The company has grown its business over the last several years, recently expanding to Charlotte. In a release, the company said that is currently projected to buy and sell more than $1.5 billion in single-family homes over the next year.
According to details provided by the company, the funding is a combination of new equity and debt financing.
Included in the financing is a $100 million extension of OfferPad’s existing credit facilities.
Additionally, OfferPad also raised $50 million in new equity funding. Leading the capital raise was LL Funds, which currently manages $1.4 billion for endowments, foundations, individuals, and family offices through multiple private-equity and fixed-income investment vehicles.
According to the company, this new round of funding means that OfferPad has now raised more than $410 million in equity and debt over the last 16 months.
The company said that it plans to use the new money to continue its growth, including expanding into new markets beyond the eight it currently operates in.
“We believe homeowners should be in control of every step of the real estate transaction, and our goal is to allow people to make the best decision for themselves and their family,” Jerry Coleman, co-founder and co-CEO of OfferPad, said.
“Our approach fundamentally changes the way people buy and sell homes, meeting the needs of today's consumer,” Coleman continued.
“This new capital investment will allow us to continue to expand our service offerings throughout the U.S. and provide new offerings to streamline the entire process of buying or selling a single-family home,” Coleman added. “We are confident that OfferPad has the most experienced real estate team, the best technology, and the best experience for buyers and sellers, and we are excited to help more people across the country.”